Head-To-Head Comparison: DICK’S Sporting Goods (NYSE:DKS) & CarMax (NYSE:KMX)

DICK’S Sporting Goods (NYSE:DKS) and CarMax (NYSE:KMX) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Institutional and Insider Ownership

89.8% of DICK’S Sporting Goods shares are held by institutional investors. 28.9% of DICK’S Sporting Goods shares are held by insiders. Comparatively, 1.0% of CarMax shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for DICK’S Sporting Goods and CarMax, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DICK’S Sporting Goods	1	8	12	0	2.52
CarMax	3	14	2	1	2.05

DICK’S Sporting Goods presently has a consensus target price of $170.22, suggesting a potential upside of 28.78%. CarMax has a consensus target price of $51.00, suggesting a potential downside of 18.94%. Given DICK’S Sporting Goods’ stronger consensus rating and higher possible upside, equities research analysts clearly believe DICK’S Sporting Goods is more favorable than CarMax.

Profitability

This table compares DICK’S Sporting Goods and CarMax’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DICK’S Sporting Goods	3.97%	19.21%	6.07%
CarMax	0.84%	6.64%	1.53%

Risk and Volatility

DICK’S Sporting Goods has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, CarMax has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares DICK’S Sporting Goods and CarMax”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DICK’S Sporting Goods	$21.15 billion	0.56	$849.24 million	$9.31	14.20
CarMax	$26.35 billion	0.34	$247.29 million	$1.53	41.12

DICK’S Sporting Goods has higher earnings, but lower revenue than CarMax. DICK’S Sporting Goods is trading at a lower price-to-earnings ratio than CarMax, indicating that it is currently the more affordable of the two stocks.

Summary

DICK’S Sporting Goods beats CarMax on 12 of the 15 factors compared between the two stocks.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.

About CarMax

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.